Angela Wang & Co.

In 2024, the Chinese government introduced major changes to the labour law framework in response to demographic shifts, economic pressures, and global privacy and data protection challenges. These changes will take place gradually and are expected to have a long-lasting impact on all employees in China. However, employers should benefit from a more stable workforce. Key updates to the China labour law changes in 2024 are outlined below.

 

Gradual Increase of Retirement Age in China

 

The “Decision of the Standing Committee of the National People’s Congress on Incrementally Raising the Statutory Retirement,” passed on 13 September 2024, outlines the gradual increase of the statutory retirement age in China over a 15-year period starting from January 2025.

 

For male employees, the retirement age will increase from 60 to 63. For female employees, the retirement age will vary as follows, depending on job type :-

 

• Managerial/technical positions (干部或技术人员) : Retirement age will rise from 55 to 58.
• General workers (工人) : Retirement age will increase from 50 to 55.

 

Implementation Guidelines

 

The “Measures of the State Council for Incrementally Raising the Statutory Retirement Age” provide detailed guidelines for implementation of these adjustments :-

 

• For male employees and female employees in managerial/technical roles, the retirement age will increase by one month every four months starting January 2025.
• For female workers, the retirement age will increase by one month every two months after the same date.

 

These specific guidelines are designed to ensure a structured implementation of the retirement age in China, allowing employees and employers to plan more effectively.

 

Extension of Pension Minimum Contribution Period

 

Following the gradual increase in retirement age, the China labour law changes in 2024 also provide guidelines for the corresponding adjustment in the pension scheme starting from 1 January 2030.

 

With effect from January 2030, the minimum contribution period for pension payments will extend from 15 years to 20 years, with the period increasing by six months per year.

 

For example :-

 

• By 2032, the minimum contribution period will be 16 years and six months.
• By 2039, it will reach the required 20 years.

 

This adjustment underscores the importance for both employers and employees to prepare for long-term retirement planning. A table listing the relevant minimum contribution period for the years 2030 to 2039 can be found in the appendix of the Measures.

 

Flexibility on Retirement Age

 

The 2024 labour law updates also introduce greater flexibility around the retirement age in China. Clause 3 of the “Measures” outlines that employees who meet the minimum pension contribution period can voluntarily retire earlier, but not more than three years before the statutory retirement age. The minimum retirement thresholds remain :-

 

• 50 years for female workers,
• 55 years for female managerial/technical staff, and
• 60 years for male employees.

 

Additionally, employees who have reached the statutory retirement age will also be given an option, subject to agreement with their employers, to delay their retirement by no more than three years. These updates provide employees with greater control over their retirement plans whilst addressing workforce needs for flexibility.

 

Relaxed Regulations for Cross-Border Data Transfers

 

A notable revision relates to cross-border data transfer regulations. On 22 March 2024, the Chinese government introduced the “Provisions on Facilitating and Regulating Cross-Border Data Flow,” streamlining human resource management for foreign and multinational companies operating in China.

 

Under Clause 5 of the Provisions, companies transferring data abroad for cross-border human resource management are exempt from several previously mandatory procedures below :-

 

• Completing a security assessment of outbound data transfers,
• Signing personal data outbound transfer standard contracts, and
• Obtaining personal data protection certifications.

 

This revision reduces administrative costs and improves operational efficiency for organisations, offering significant benefits for multinational corporations conducting business in China.

 

Revised PRC Company Law 2024 and Corporate Governance Improvements

 

Besides the statutes, regulations, rules and announcements which directly focus on labour law, the reform in the PRC Company Law (2024 revision, which took effect on 1 July 2024) also has implications for the labour field, particularly regarding employee representation and corporate governance.

 

Enhanced Worker Representation

 

Article 68 of the Company Law revision states that companies with more than 300 employees must include employee representatives in corporate decision-making. Specifically :-

 

• If there is no board of supervisors with employee representation, an employee director must be appointed to the board of directors.

 

This revision reinforces employee rights in China, ensuring workers have a say in organisational decisions.

 

Accountability for Directors and Management

 

The 2024 Company Law revisions also reinforce director and management accountability :-

 

• The duty of diligence and care is emphasised for directors and senior management.
• There are stricter penalties for breaches that negatively affect employees’ interests.

 

These updates serve as a reminder for companies to prioritise ethical governance practices and protect employees’ interests.

 

Employer Action Required

 

Employers in China must remain vigilant about the 2024 labour law changes. Reviewing employment contracts, internal policies, and handbooks are essential to align workforce management with the China labour law changes in 2024. Taking proactive steps will not only ensure compliance but also secure employee trust for all employers in China.

 

Key Steps for Employers :-

 

1. Update retirement policies in line with the phased increase in retirement ages and the minimum pension contribution period.
2. Integrate updated processes for cross-border human resource data management to leverage the relaxed regulations.
3. Strengthen corporate governance practices, including the inclusion of employee representatives where applicable.

 

If you have any questions about the above article, labour and employment law in both China and Hong Kong, or conducting business in China, experienced lawyers in our China Business team and Employment team will be happy to assist you.